Reinsurance News

Helios announces up to £60mn capital raise

9th March 2021 - Author: Luke Gallin

Helios Underwriting has successfully raised gross proceeds of approximately £53.5 million through the placing and subscription of New Ordinary Shares at a price of £1.60 per share, with participation from ILS Capital Management and Hudson Structured Capital Management Limited.

helios-underwriting-logoThe two ILS and reinsurance investment managers are together subscribing for £40.8 million of an up to £60 million capital raise.

Funds under management of, or associated with ILS Capital Management have subscribed for, in aggregate, £20.8 million. Additionally, Tom Libassi, co-founder and managing partner of ILS Capital Management, has agreed to become a non-executive director of Helios.

Hudson Structured has subscribed for £20 million in the raise for Helios, and presumably this is via its HSCM Bermuda branch which undertakes its reinsurance related investing.

The Directors of Helios have said that the support from such knowledgeable insurance players “endorses the current business model and echoes their view that pricing in the insurance market is attractive.”

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Helios, the unique investment vehicle which acquires and consolidates underwriting capacity at Lloyd’s, has secured £43.8 million through the issuance of 27,375,000 New Ordinary Shares at £1.60 per share, the large majority of which appears to be the ILS Capital Management and Hudson Structured investments.

Additionally, the firm has said that a total of 6,037,625 New Ordinary Shares have been placed at the issue price with existing and new investors pursuant to the placing, raising a further £9.7 million, subject to shareholder approval.

And, on top of the £53.5 million already secured, the company proposes to raise up to a further £3 million by way of a conditional open offer of 1,861,787 Open Offer shares to qualifying shareholders at the issue price, subject to shareholder approval.

So, this would take the total raised by Helios in this capital raise to £56.5 million, which is near the up to £60 million announced by the firm yesterday.

Interestingly, the issue price of £1.60 per share represents a discount of around 17.9% to the closing price of £1.95 per share on March 8th, 2021, and a premium of 6% to the firm’s pro-forma adjusted net asset value of £1.51 per share as at June 30th, 2020.

Helios states that it intends to use the proceeds to accelerate its LLV acquisition strategy with a targeted campaign of additional LLV acquisitions over the next year. The company adds that it has a flexible and adaptive business plan to optimise the deployment of the net proceeds to finance an increase in the capacity from pre-emptions, and to increase the retained capacity by Helios and to participate in capacity auctions.

Finally, Polar Capital, which holds 5,000,000 Existing Ordinary Shares representing roughly 14.9% of the Existing Ordinary Shares, has agreed to subscribe for 4,875,000 Placing Shares. 

Helios’s Chief Executive Officer (CEO), Nigel Hanbury, commented: “This is a period of unprecedented opportunity for Helios, with a hardening market coupled with the opportunities we see to make further LLV acquisitions which would be value enhancing for our shareholders. Helios is uniquely positioned to capitalise on these opportunities. We are delighted with the results of the fundraise and thank our existing shareholders for their support and welcome our new investors.” 

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